Turbotax: Net file Error relevant to sale of residential property

 

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Relevant Material: A NETFILE error when reporting the sale of residential property usually means there is an issue with how the information was entered in your tax software, not necessarily a problem with the sale itself. The specific resolution depends on the exact error code or message you received. 

Here are common issues and solutions:
Common Errors and Solutions
  • Missing or Incomplete Information: You must report the sale of your principal residence on your tax return, even if the capital gain is fully exempt. This requires completing Schedule 3 and Form T2091(IND), Designation of a Property as a Principal Residence by an Individual.
    • Solution: Ensure all required fields (acquisition date, disposition date, proceeds of disposition, adjusted cost base) are filled out correctly within your tax software. Use the software's navigation or "forms mode" to locate and complete these sections.
  • Software Glitches or Bugs: Sometimes, the tax software itself might have a temporary bug, particularly early in the filing season.
    • Solution: Check for updates to your tax software, as developers often release patches for known issues. A temporary workaround might be to re-enter the property information or delete and recreate the form entry.
  • Incorrect Data Entry (e.g., "Yes" instead of "No"): Answering an initial question incorrectly (e.g., accidentally indicating "yes" to selling a property when you didn't, or vice-versa) can trigger an error.
    • Solution: Go back to the initial "CRA Questions" or "Info Worksheet" section in your software and confirm your answer regarding the sale of a principal residence is correct.
  • Locked NETFILE Account: Attempting to submit your return unsuccessfully too many times (typically five) can lock your account.
    • Solution: Wait a short period or contact the CRA directly to unlock your NETFILE account. 
If the Error Persists
  • Contact Your Software Support: Your tax software provider's support team can offer specific guidance for their product, often using tools like screen sharing to help diagnose the problem.
  • Contact the CRA: The Canada Revenue Agency (CRA) EFILE Helpdesk can assist with specific error codes that are not resolved by general troubleshooting. You can find their contact information on the Canada.ca website.
  • Print and Mail: If electronic filing continues to fail, you always have the option to print and mail a paper copy of your return to the CRA. 
Important Note: Failure to report the sale of a principal residence can result in penalties, so it is crucial to resolve the error and ensure your return is filed correctly. The normal three-year limitation period for an audit only starts running once the form is actually filed. (Google) 
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